A creditor uses a third-party automated underwriting system that approves a loan, but the loan officer discovers the borrower provided false employment information after closing. What is the creditor's QM safe harbor status?
Correct Answer
B) Safe harbor is maintained if the AUS approval was obtained in good faith
Under 12 CFR 1026.43(e)(4), if a creditor obtains approval through an eligible AUS and meets other QM requirements, the safe harbor protection is maintained even if borrower information is later discovered to be inaccurate, provided the creditor acted in good faith in obtaining the AUS approval.
Why This Is the Correct Answer
Under 12 CFR 1026.43(e)(4), if a creditor obtains approval through an eligible AUS and meets other QM requirements, the safe harbor protection is maintained even if borrower information is later discovered to be inaccurate, provided the creditor acted in good faith in obtaining the AUS approval.
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